The Electricity Capacity Regulations 2014

[^key-a10677cd76b8c123f027defbcb59f82d]: Words in reg. 2(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 3(c)

[^key-be91250a1e77ff30c4f32403662979bb]: Words in reg. 2(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 3(d)

[^key-264a3bfa55ede3f9ffcc6826eca18fb2]: Words in reg. 2(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 3(e)

[^key-031c4b8839e725333cbedc9ed056f207]: Words in reg. 2(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 3(f)

[^key-b8520189e94d07ba0fe2c24d3201d53f]: Words in reg. 2(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 3(g)

[^key-6673452fc27bf9301670285c85c15e1c]: Words in reg. 6(2)(a)(i) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 4

[^key-3e55ca3d496be7954f57e0f4f8516840]: Reg. 7(6)-(9) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 5

[^key-28831cbdb0b1aadce32a347c21a8e2c8]: Words in reg. 11(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 6(a)

[^key-829cb76ba1817288ea8938f626a6de29]: Reg. 11(1)(h) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 6(b)

[^key-450b8622983beba856d0427524801158]: Words in reg. 12(5)(a) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 7

[^key-e855c99cf4f94077d071bd62065f9a3f]: Word in reg. 14(1) substituted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 8(a)

[^key-0a91400feff831143006038e5265ca0a]: Reg. 14(3) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 8(b)

[^key-e074d9fede8100f877b7cdf5c15d9a29]: Words in reg. 16(2)(a)(i) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 4(a)(i)

[^key-e157512ed2ffb50b92043cca028b0e0b]: Words in reg. 16(2)(a)(ii) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 4(a)(ii)(aa)

[^key-fe3e74b80a19ffbb2f86584bdd64f700]: Reg. 16(2)(a)(ii) comma inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 4(a)(ii)(bb)

[^key-b6206d24aeba911a41c8a70ba1e5ab31]: Words in reg. 16(2A) substituted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 4(b)

[^key-b3546a051acd5b89b98235ce70311cc9]: Reg. 29 omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 9

[^M_F_296b4da3-427e-4f30-fead-f708058138b5]: Reg. 29A omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 9

[^key-aeb0fce120ff9fcabbe434fbbde39d3f]: Word in reg. 30(4)(a) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 10(a)

[^key-c15486a379e3465c46f65bc905ca31e1]: Reg. 30(4)(b) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 10(b)

[^key-4596d77f37468c3fc8c9862fffe8fb09]: Words in reg. 34(3) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 5

[^key-caa530ffd8d7a3acc632132d30faa2d4]: Reg. 44 omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 11

[^key-d85ac64f4ddd05550418097bd788c275]: Word in reg. 45 omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 12(a)

[^key-97115d02e7eacdc3cabd9f3575ffef39]: Word in reg. 45 omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 12(b)

[^key-a5323dcc00b3e18d0f6f261efe21ec20]: Words in reg. 59(2) substituted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 13(a)(i)

[^key-12d60985823922475c007e87c948e96d]: Reg. 59(2)(b) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 13(a)(ii)

[^key-e3bf3ca8698b189fc8c8f33dd105bf4a]: Reg. 59(2A) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 13(b)

[^key-2419e0bed1419666915f7b1eae3fb931]: Reg. 59(2B) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 13(b)

[^key-e417b25a70b9a68187cd0972651b2262]: Reg. 60(2)(b) and word omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 14

[^key-ac1702302c66b07c4b6588acdd331da2]: Reg. 60(1)(ga) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 7

[^key-c6fb390a8afecbce5007cc224b91efd4]: Words in reg. 68(2) Table inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 8(a)

[^key-695a896f55103c8cb76a6d37637acc2f]: Words in reg. 68(3) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 8(b)

[^key-b7965d433418cd1305911cd487de4b8f]: Words in reg. 69(5) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 9(a)

[^key-a7cd7873749ffe69dc620f38fc7c5746]: Words in reg. 69(5A) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 9(b)(i)

[^key-33f184063787d2313f1a2402a47feb52]: Words in reg. 69(5A)(a) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 9(b)(ii)

[^key-bcd72ef19dcdd635f9d9f6d0a797e405]: Words in reg. 69(7) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 9(c)

[^key-ab84aee219b23f3016d7472a6800f685]: Words in reg. 69(5) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 15

[^key-53dcc1b65c8d680069a408a04ff5d4b8]: Words in reg. 70(4)(c) inserted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), regs. 1(2), 10

[^key-050a543e3c63087a1a4211043246d35a]: Words in reg. 87C(1) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 17(a)

[^key-1a6c4fcbcfd04ef8e5a219c1cb20f88c]: Words in reg. 87C(2)(a) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 17(b)(i)(aa)

[^key-fc72b0e887018131fda6a26092fe6dfb]: Word in reg. 87C(2)(a) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 17(b)(i)(bb)

[^key-2b4f31aa660f4c103e5d232ce595c89c]: Reg. 87C(2)(b) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 17(b)(ii)

[^key-2ea4d6bda1893b2eb2f8f8cf027fb90b]: Words in Sch. 1 para. 3(4) substituted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 18(a)(i)

[^key-a5ac689b4c2f3fa312e4ab7a79e3480e]: Sch. 1 para. 3(6) omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 18(a)(ii)

[^key-60fb68b7f01c0ffc2be182370916872d]: Words in Sch. 1 para. 5(4) substituted (23.7.2025) by The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 18(b)

[^key-6f462ddd2fcd110a7a46cd257edf88cd]: Sch. 1 para. 9 omitted (23.7.2025) by virtue of The Electricity Capacity (Amendment) (No. 2) Regulations 2025 (S.I. 2025/917), reg. 1(2), Sch. para. 18(c)

"Interconnector CMU"

5A

• (1) An “interconnector CMU” is—

• (a) an existing interconnector which meets the conditions in paragraph (3); or

• (b) a prospective interconnector which when commissioned (or, as the case may be, recommissioned) will meet the conditions in paragraph (3).

• (2) In paragraph (1)—

• “existing interconnector” means an electricity interconnector that has been commissioned;

• “prospective interconnector” means an electricity interconnector or proposed electricity interconnector that—has not been commissioned; oris to be subject to an improvements programme and has not been recommissioned following that improvements programme.

• (3) The conditions referred to in paragraph (1) are that—

• (a) the electricity interconnector has a connection capacity not less than the minimum capacity threshold; and

• (b) the net output of the electricity interconnector is measured by one or more half hourly meters in accordance with capacity market rules.

Non-completion fee

43A

• (1) A capacity provider in respect of a new build interconnector CMU must pay to the Settlement Body a fee (a “non-completion fee”) by way of a financial penalty if, in circumstances specified for the purposes of this regulation by capacity market rules, the capacity provider fails to meet the completion requirements of the capacity agreement.

• (2) For the purposes of paragraph (1)—

• “completion requirements” are requirements to reach a level of operational capability specified in capacity market rules by the end of a delivery year;

• “new build interconnector CMU” means a prospective interconnector CMU which has not been commissioned.

• (3) The Settlement Body must, as soon as reasonably practicable after receiving notice in accordance with capacity market rules of the imposition of a non-completion fee—

• (a) determine the amount in pounds of the non-completion fee that is payable; and

• (b) issue to the capacity provider an invoice for that amount.

• (4) Paragraphs (3) to (5) of regulation 43 apply to the determination of the amount of a non-completion fee as they apply to the determination of the amount of a termination fee.

• (5) For the purposes of this regulation, references in regulation 32(1)—

• (a) to a “termination fee” are to be construed as references to a non-completion fee; and

• (b) to termination on a ground specified in capacity market rules are to be construed as references to a failure to meet completion requirements in circumstances so specified.

• (6) Regulation 33 applies (except for paragraphs (2)(b), (3) and (5)(b)) to a non-completion notice as it applies to a termination notice, and for that purpose, a reference in regulation 33 to—

• (a) a “termination fee” is to be construed as a reference to a non-completion fee; and

• (b) a “termination notice” is to be construed as a reference to a non-completion notice.

Repayment of capacity payments: termination

43B

• (1) A capacity provider must repay capacity payments to the Settlement Body if—

• (a) a capacity agreement is terminated on a ground specified in capacity market rules; and

• (b) capacity market rules specify that capacity payments are repayable in the event of the capacity agreement being terminated on that ground.

• (2) The Settlement Body must, as soon as reasonably practicable after receiving final notice of termination of the capacity agreement—

• (a) determine the amount in pounds of the capacity payments that are repayable; and

• (b) issue to the capacity provider an invoice for that amount.

• (3) Where capacity market rules specify that capacity payments are repayable in respect of—

• (a) the period TP1, the capacity payments that must be repaid are those made in respect of the period beginning with the date of the termination notice and ending with the date of termination of the relevant capacity agreement;

• (b) the period TP2, the capacity payments that must be repaid are those made in respect of the period beginning with the date of the termination event and ending with the date of termination of the relevant capacity agreement;

• (c) the period TP3, the capacity payments that must be repaid are those made in respect of the period beginning with the date on which capacity payments began under the relevant capacity agreement and ending with the date of termination of the relevant capacity agreement ;

• (d) the period TP4, the capacity payments that must be repaid are those made in respect of the period beginning on 1st October, and ending on 1st May, of the relevant delivery year.

• (4) In this regulation—

• (a) “final notice of termination” means a notice given by the Delivery Body in accordance with capacity market rules that the capacity agreement has terminated; and

• (b) “termination event” and “termination notice” have the meaning given in the Rules.

• (5) This regulation applies to the termination of a transferred part as it applies to the termination of a capacity agreement.

Repayment of capacity payments: metering fault

43C

• (1) A capacity provider must repay capacity payments to the Settlement Body if—

• (a) a metering test certificate or DSR test certificate is, in accordance with capacity market rules, determined to be invalid on a ground specified in those rules; and

• (b) capacity market rules specify that capacity payments are repayable in the event that a metering test certificate or DSR test certificate is determined to be invalid on that ground.

• (2) The Settlement Body must, as soon as reasonably practicable after the relevant date—

• (a) determine the amount in pounds of the capacity payments that are repayable; and

• (b) issue to the capacity provider an invoice for that amount.

• (3) In paragraph (2) the “relevant date” means the date on which, in accordance with capacity market rules—

• (a) in the case of a metering test certificate, the certificate was determined by the Settlement Body to be invalid; or

• (b) in the case of a DSR test certificate, the Settlement Body received notice of the invalidity of the certificate.

• (4) Where capacity market rules specify that capacity payments are repayable in respect of—

• (a) the period MP1, the capacity payments that must be repaid are those made in respect of the period beginning with the relevant invalidation date and ending with the date on which the relevant metering recovery payment notice is issued;

• (b) the period MP2, the capacity payments that must be repaid are those made in respect of the period beginning with the relevant invalidation date and ending with the date on which the relevant completion notice is issued;

• (c) the period MP3, the capacity payments that must be repaid are those made in respect of the period beginning with the first day of the relevant delivery year and ending with the date on which the relevant metering recovery payment notice is issued.

• (5) In this regulation, “completion notice”, “invalidation date”, “metering recovery payment notice” and “metering test certificate” have the meaning given in the Rules.

Transitory provisions: the second T-4 auction

87A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repeal

Second DSR transitional auction

29A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Transfer of a capacity agreement

30A

• (1) A capacity agreement may be transferred in accordance with capacity market rules so as to apply in respect of a CMU—

• (a) for the entire delivery year, or period of delivery years, for which the capacity agreement has effect; or

• (b) only for a specified number of calendar days in such a delivery year (“the transfer period”).

• (2) A transfer under paragraph (1) may be made—

• (a) in respect of the entire capacity obligation comprised in the capacity agreement; or

• (b) in respect of a part only of that obligation.

• (3) For the purposes of this regulation, a “transferred part” comprises the rights and obligations accruing to the transferee in respect of a CMU where the capacity agreement (“the related agreement”) is transferred under paragraph (1)(b) or (2)(b).

• (4) A transferred part may be terminated, in accordance with capacity market rules, so as to extinguish the rights and obligations accruing to the transferee.

• (5) But a termination of the transferred part does not—

• (a) in itself amount to the termination of the related agreement; or

• (b) affect any rights and obligations accruing—

• (i) in a part of a delivery year that is not included in the transfer period; or

• (ii) in relation to any part of the capacity obligation that is not transferred.

• (6) A termination of the related agreement does not in itself amount to the termination of a transferred part and does not extinguish the rights and obligations accruing in respect of the transferred part.

• (7) This regulation applies to the further transfer of a transferred part as it applies to a transfer of a capacity agreement.

Capacity market register

Termination fee rates

Termination of capacity agreements: Secretary of State's discretion

Termination of capacity agreements: CFDs and ROO conversions

Null and void capacity agreements

Termination fees: adjustment for DSR providers

43ZA

• (1) This regulation applies where—

• (a) a termination fee is payable by a DSR provider;

• (b) before that termination fee became payable, the Settlement Body had drawn down applicant credit cover provided by the DSR provider in accordance with regulation 60(3) or regulation 61(1)(a)(ii);

• (c) the termination fee and the applicant credit cover relate to the same unproven demand side response CMU; and

• (d) either—

• (i) the termination fee and the applicant credit cover relate to the same capacity auction; or

• (ii) the termination fee relates to a capacity auction for which no further applicant credit cover was required to be provided because of regulation 59(1B).

• (2) The amount of the termination fee to be determined and invoiced under regulation 43 is reduced by the amount of the credit cover drawn down.

Non-completion fee

Repayment of capacity payments: termination

Repayment of capacity payments: metering fault

Transitory provisions: the third T-4 auction and supplementary auction

87B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Repeal

Capacity provider penalty charges: apportionment

6A

• (1) Immediately after calculating SPPSAij for a relevant CMU i and any relevant settlement period j in month M under paragraph 6, the settlement body must also calculate D in accordance with the formula—

$D=SPPSAij−SPPSAi(j−1)$,

where “SPPSAi(j-1)” is the settlement period penalty settlement amount for CMU i in the relevant settlement period preceding period j (or, where j is the first such period in month M, zero).

• (2) For each relevant settlement period j in month M, the settlement body must then determine for each obligation ICOij applying to CMU i in that settlement period (“ICOijN”)—

• (a) the monthly penalty cap applying in respect of ICOijN (“MPCijN”); and

• (b) the apportioned settlement period penalty amount for ICOijN (“ASPPAijN”) as determined in accordance with sub-paragraph (4).

• (3) For the purpose of sub-paragraph (2)(a), MPCijN is to be determined in accordance with the formula—

$MPCijN=ICOijN×PEzx×WFmx×Fz−∑k=1j−1ASPPAikN$,

where—

• “ICOijN” is the whole or a part of the capacity obligation COzx awarded in respect of CMU z for year X,

• “PEzx” means the price in pounds per MW determined for COzx in accordance with paragraph 3(4) to (6),

• “Fz” is to be interpreted in accordance with paragraph 6(6), and

• “$∑k=1j−1ASPPAikN$”means the sum of all apportioned settlement period penalty amounts calculated for ICOijN when that obligation applies to CMU i in any relevant settlement period in month M that precedes period j (or, where j is the first such period, zero).

• (4) For the purpose of sub-paragraph (2)(b) ASPPAijN is to be determined as follows (where D is the result of the calculation referred to in sub-paragraph (1))—

• (a) for each obligation ICOijN referred to in sub-paragraph (2), calculate PRN in accordance with paragraph 5(3), and arrange those obligations in a series (beginning with ICOij1) as described in paragraph (b);

• (b) each such obligation ICOijN is ranked according to the magnitude of its corresponding PRN (in descending order with the highest corresponding penalty rate first), except that where the same penalty rate corresponds to more than one such obligation those obligations are ranked between themselves—

• (i) according to the date on which the obligation was awarded in respect of CMU i, or transferred so as to apply to CMU i (with the latest such date first), and

• (ii) for obligations awarded or transferred on the same date, according to the time at which a request to transfer the obligation was received by the Delivery Body (with the latest such time first), and with an awarded obligation ranking prior to any transferred obligation;

• (c) then for any such ICOijN—

• (i) if$∑k=1NMPCijk>D$,$ASPPA=ijNMPCijN$;

• (ii) if $∑k=1N−1MPCijkD$,$ASPPAijN=D−∑k=1N−1MPCijk$; and

• (iii) otherwise, $ASPPAijN=0$.

Over-delivery payments

Apportionment between capacity providers

Settlement costs levy: the first levy period

Reducing capacity payments: offsetting relevant expenditure

49A

• (1) This paragraph applies if, before the time when a credit note is issued to a capacity provider (“C”) for a capacity payment, the Delivery Body has acknowledged receipt of a declaration under the Rules that—

• (a) relevant expenditure has been incurred, or is expected to be incurred; or

• (b) relevant benefit has been received, or is expected to be received,

in respect of the capacity committed CMU for which C is responsible (“CMU i”).

• (2) If paragraph (1) applies, the Settlement Body must ensure that the credit otherwise payable to C is reduced—

• (a) by the aggregate amount of any outstanding relevant expenditure and outstanding relevant benefit; or

• (b) to nil, if the aggregate amount of any outstanding relevant expenditure and outstanding relevant benefit is equal to or greater than the amount of the credit.

• (3) The Settlement Body must ensure that the credit note issued to C states the amount by which the credit is reduced, and the reason for the reduction.

• (3A) This paragraph applies where—

• (a) the aggregate amount of any outstanding relevant expenditure and outstanding relevant benefit (“aggregate outstanding amount”) in respect of CMU i is greater than nil; and

• (b) there are no further capacity payments in respect of CMU i which the Settlement Body would be required to reduce under paragraph (2) to offset this aggregate outstanding amount.

• (3B) Where paragraph (3A) applies—

• (a) C is liable to pay to the Settlement Body an amount equal to the lesser of—

• (i) the aggregate outstanding amount; or

• (ii) the total amount of all the capacity payments paid to C in respect of CMU i, less the amount of any repayment of these capacity payments by C to the Settlement Body under regulation 43B, 43C or 50; and

• (b) the Settlement Body must, as soon as reasonably practicable after paragraph (3A) becomes applicable, issue to C an invoice for the amount C is liable to pay under sub-paragraph (a).

• (4) This regulation applies to a credit note or invoice issued in respect of a transferred part as it applies to a credit note or invoice issued in respect of a capacity agreement, and where a capacity agreement has been transferred pursuant to regulation 30A(1)(b) or (2)(b)—

• (a) the reduction in the amount payable to C pursuant to paragraph (2) is to be calculated so that it is proportionate to the period and part of the capacity obligation held by C during the month to which the credit note relates; and

• (b) the aggregate outstanding amount attributable to C under paragraph (3B)(a) is to be determined by adjusting this amount so that it is proportionate to the period and part of the capacity obligation held by C throughout the duration of the capacity agreement.

• (5) In this regulation—

• “outstanding relevant benefit” means relevant benefit that has not been deducted from capacity payments pursuant to this regulation;

• “outstanding relevant expenditure” means relevant expenditure that has not been deducted from capacity payments pursuant to this regulation; and

• “relevant benefit” has the meaning given in the Rules.

• “relevant expenditure” has the meaning given in the Rules.

Reducing capacity payments: failure to demonstrate satisfactory performance

Withholding credit payments to capacity providers

Payment of withheld credit

Transitory provisions: the T-3 auction

87C

• (1) This regulation applies if the Secretary of State determines ... that the T-3 auction is to be held.

• (2) Where this regulation applies—

• (a) references to a T-4 auction in regulations ... 31(2)(e), ... 59(2)(a), 60(2)(a) and Schedule 1 are treated as including the T-3 auction;

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) regulation 59 (requirement to provide applicant credit cover) applies—

• (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (ii) in relation to credit cover provided in respect of the T-3 auction and the subsequent T-4 auction as if for paragraphs (2A) and (2B) there were substituted—

(2A) Paragraph (2B) applies where an applicant for the T-3 auction and the subsequent T-4 auction is required to provide applicant credit cover in respect of the same CMU (“CMU i”) for both auctions in accordance with this regulation. (2B) Where this paragraph applies— (a) the applicant may satisfy their obligation to provide credit cover in respect of CMU i for both auctions by providing credit cover of an amount equal to the greater of the amounts determined under paragraph (2)(a) in respect of— (i) the T-3 auction; and (ii) the subsequent T-4 auction; (b) credit cover provided in accordance with sub-paragraph (a) may be drawn down under regulation 61(1) in relation to a capacity agreement awarded in either of the auctions referred to in sub-paragraph (a); and (c) notwithstanding paragraph (1)(h) or (3) of regulation 60, any credit cover drawn down in relation to a capacity agreement awarded in either of the auctions referred to in sub-paragraph (a) must be replaced in accordance with the obligation under regulation 60(1) to maintain credit cover in respect of the other auction.

• (d) regulation 60 (credit obligation period) applies in respect of the T-3 auction and the subsequent T-4 auction as if—

• (i) before paragraph (1)(a) there were inserted—

(aa) where credit cover provided by A in respect of CMU i for an auction (“auction X”) also satisfies A’s obligation to provide credit cover in respect of CMU i for another auction because regulation 59(2B) applies and an event in sub-paragraph (b) to (h) has occurred in respect of the other auction;

• (ii) after paragraph (1) there were inserted—

(1A) Where paragraph (1)(aa) applies, A must thereafter maintain credit cover in respect of auction X in an amount equal to— (a) the amount calculated under regulation 59(2)(a) in respect of A’s application to prequalify for auction X in respect of CMU i; or (b) where paragraph (1)(a) applies, the amount calculated under paragraph (2) in respect of CMU i and auction X, until the earliest of the events in sub-paragraphs (b) to (h) of paragraph (1) has occurred in respect of auction X.

; and

• (iii) after paragraph (4) there were inserted—

(4C) Paragraphs (1) to (4) are subject to paragraph (4D). (4D) Where regulation 59(2B) applies, A is required to maintain credit cover in the amount equal to the greater of the amounts A is required to maintain in respect of CMU i under this regulation in relation to— (a) the T-3 auction; and (b) the subsequent T-4 auction, until the applicant is no longer required to maintain credit cover in respect of CMU i in relation to either auction.

; and

• (e) regulation 69(3) applies to requests for review of prequalification decisions for—

• (i) the T-1 auction for the delivery year commencing on 1st October 2020;

• (ii) the T-3 auction; and

• (iii) the subsequent T-4 auction,

as if for “15” there were substituted “20”.

• (3) In this regulation “subsequent T-4 auction” means the T-4 auction for the delivery year commencing on 1st October 2023.

Repeal

Regulations 16 and 17: interpretation

Reduction of the duration of capacity agreements: Secretary of State’s discretion

33A

• (1) This regulation applies where the Delivery Body gives a reduction notice to a capacity provider under the Rules.

• (2) The Secretary of State may, if the Secretary of State thinks fit, within 3 months of the date on which the reduction notice is given—

• (a) direct the Delivery Body to extend the date by which the capacity provider must meet a specified requirement; or

• (b) direct the Delivery Body to withdraw the reduction notice.

• (3) The date to which a requirement is extended by virtue of a direction under paragraph (2)(a) must not be later than 6 months after the date on which the reduction notice is given.

• (4) If a capacity provider wishes the Secretary of State to exercise the discretion in paragraph (2), the capacity provider must make representations to the Secretary of State.

• (5) Representations under paragraph (4) must—

• (a) be made in writing within 20 working days after the date on which the reduction notice is given;

• (b) request a direction under paragraph (2);

• (c) specify the reasons for requesting a direction under paragraph (2); and

• (d) where a direction under paragraph (2)(a) is requested, specify a cure plan.

• (6) The Secretary of State must consider any representations made in accordance with paragraph (4).

• (7) In this regulation—

• (a) a “cure plan” means proposals by the capacity provider demonstrating how it will comply with the specified requirement;

• (b) a “specified requirement” means a requirement in the Rules, the noncompliance with which is specified in the reduction notice; and

• (c) “reduction notice” has the meaning given in the Rules.

Termination of capacity agreements: CFDs and ROO conversions

Null and void capacity agreements

Termination of capacity agreements: CCS CFDs

34A

• (1) This regulation applies where a capacity provider gives the Delivery Body, in accordance with capacity market rules, a CCS CFD transfer notice in relation to a CMU (“CMU i”) to which a capacity agreement (“A”) applies.

• (2) The Delivery Body must give a notice specifying the CCS CFD related termination date in respect of A, to—

• (a) the capacity provider in respect of A;

• (b) the Secretary of State;

• (c) the Authority;

• (d) the Settlement Body; and

• (e) the CFD counterparty.

• (3) A is terminated on the CCS CFD related termination date specified in the notice given by the Delivery Body under paragraph (2) unless—

• (a) A is terminated in accordance with these Regulations or on a ground specified in the capacity market rules prior to the CCS CFD related termination date; or

• (b) the duration of A is reduced in accordance with capacity market rules such that it expires before the CCS CFD related termination date.

• (4) In this regulation—

• “CCS CFD” means a CFD in connection with which an eligible generator is to alter an existing generating station so that it becomes a generating station connected to a complete CCS system;

• “CCS CFD evidence” has the meaning given in the Rules;

• “CCS CFD payment start date” means the date on which a person becomes eligible under a CCS CFD to receive a generation counterparty payment;

• “CCS CFD related termination date” means the date which is:the last day of the capacity year which the capacity provider in respect of CMU i specifies in a CCS CFD transfer notice as the final delivery year of A; orsix working days after the CCS CFD transfer notice window during which a CCS CFD transfer notice is given, where the capacity provider in respect of CMU i states in a CCS CFD transfer notice that it intends for A to end before its first delivery year;

• “CCS CFD transfer notice” means a notice from a capacity provider which—identifies a capacity agreement which the capacity provider holds;describes the CMU to which that capacity agreement relates;states that the capacity provider proposes to enter or has entered into a CCS CFD in respect of the CMU;specifies—the capacity year which the capacity provider intends to be the final delivery year of the capacity agreement; orthat the capacity provider intends for the capacity agreement to end before its first delivery year;requests that the Delivery Body terminates the capacity agreement on a nominated CCS CFD related termination date;is accompanied by CCS CFD evidence; andincludes a statement verifying the truth of the statements contained in and accompanying the notice, which is signed by—where the capacity provider is a company with more than one director, two directors;where the capacity provider is a company with a sole director, the sole director;where the capacity provider is not a company, by two persons duly authorised by the capacity provider;

• “CCS CFD transfer notice window” has the meaning given in the Rules;

• “complete CCS system” has the meaning given in regulation 2(1) of the Contracts for Difference (Definition of Eligible Generator) Regulations 2014;

• “generating station” has the meaning given in regulation 2(1) of the Contracts for Difference (Definition of Eligible Generator) Regulations 2014;

• “generation counterparty payment” has the meaning given in regulation 4(2) of the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014;

• “nominated CCS CFD related termination date” means, in respect of a CMU described in a CCS CFD transfer notice, a date which is—before the date which the capacity provider expects to be the CCS CFD payment start date under a CCS CFD which the capacity provider proposes to enter or has entered into in respect of the CMU; andeither—the last day of the capacity year which the capacity provider in respect of the CMU intends to be the final delivery year of the capacity agreement which applies to the CMU; orsix working days after the CCS CFD transfer notice window during which the CCS CFD transfer notice is given by the capacity provider, where the capacity provider in respect of the CMU intends for the capacity agreement to end before its first delivery year.

Null and void capacity agreements